include high coverage limits, accidents and moving violations on your driving record, being a young driver, driving an expensive vehicle, and living in a high-risk zip code.
The cost of car insurance is up in 2023 due to inflation and post-pandemic stresses on the automotive and insurance industries.
You might see higher rates even with a clean driving record if you are under 25, live in a high-risk ZIP code, or have poor credit.
8 reasons why your car insurance is so expensive
Car insurance rates depend on many factors—from your age and driving record to the type of car you drive to your zip code.
Here’s how auto insurance quotes vary based on a few common factors:
Description
Average annual rate
Minimum liability
$644
Full coverage
$2,010
18 year old with full coverage
$5,435
1 DUI with full coverage
$3, 389
Methodology: To find average rates for different profiles, we looked at data from resources like Motor 1, MarketWatch, US News, and Insurify, as well as our unique data.
This is agood reason for your car insurance to be expensive. A minimum liability insurance policy will always be the cheapest insurance you can buy—but it’s not usually the best.
As you raise your policy limits or purchase additional coverage, your premium will increase.
Pricier cars cost more to insure because they will cost your insurer more to repair or replace after a claim. If you own a luxury vehicle or sports car, you’ll pay higher insurance rates.
New cars are also more expensive to insure than older vehicles due to their high replacement cost
Classic cars may be an exception—they’re valuable but require specialized
Location is a big factor in your insurance rates, and rates can vary widely even within the same city. Living in an area deemed higher risk by insurers will usually mean pricier insurance.
Insurance costs more in urban areas than it does in rural ones
Zip codes with higher vehicle theft rates have higher premiums
Areas that are prone to severe weather (like flooding) tend to have higher auto insurance rates
You have a low credit score
There is a statistical correlation between low credit scores and insurance claims, so most insurance companies use something called a “credit-based insurance score” to set premiums. On average, drivers with good credit pay lower premiums than drivers with poor credit scores.
Some states, like California, Massachusetts, and Michigan, ban the use of credit scores when setting auto insurance premiums
For the best insurance rates, at least a “good” FICO score and solid credit history is recommended
Your insurance company is pricey
Sometimes, it’s just about the company you’re with. Insurance companies use
are a great way to reduce your insurance premium. Different insurers offer different discounts, and some may not be available with every company or in every state.
While many insurance companies automatically apply discounts that you’re eligible for, it never hurts to ask if you can find further savings.
Here are some of the most popular discounts:
Good driver: Keeping your record free of car accidents and claims for at least 3 years
Bundling: Buying two or more insurance products with the same company (like homeowners and auto)
Good student: Maintaining at least a B/3.0 average in full-time studies
Pay-in-full: Paying your premium annually instead of monthly
Multi-vehicle: Insuring two or more vehicles with the same insurance company
Accident forgiveness: Sometimes available as an add-on for purchase and sometimes applied as an automatic discount, accident forgiveness prevents a rate increase after your first accident.
Compare insurance quotes from 50+ insurance companies with Jerry in under 45 seconds
Compare insurance quotes from 50+ insurance companies with Jerry in under 45 seconds
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FAQs
Why is my car insurance so high for no reason?
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If you don’t have any recent changes to your insurance profile, such as an at-fault accident, a driving violation, or a new vehicle or address, your rate increase was probably caused by market forces, which have increased the average cost of car insurance by about 26% since 2021.
Why is car insurance so expensive?
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The cost of car insurance depends on your car’s value and your risk as a driver. Inflation and an uptick in unsafe driving habits have caused both of these factors to rise in recent years, making car insurance more expensive than ever.
How do I get my car insurance to go down?
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Building credit, enrolling in a telematics or usage-based insurance program, and comparing auto rates with Jerry are the best ways to lower your car insurance costs.